Europe’s markets regulator is seeking evidence on the safe use of tokenised collateral in EU central clearing, including a practical test: can clearinghouses access it and turn it into liquidity when a clearing member defaults? The consultation examines the conditions under which EU central counterparties, or CCPs, can use these assets safely and effectively.
Key takeaways
- The consultation tests tokenised collateral’s usability during member defaults.
- Digital twins, directly issued assets and hybrid models are in scope.
- Existing collateral safeguards must remain intact.
- Submissions close on January 15, 2027.
In a press release dated October 11, 2026, the European Securities and Markets Authority (ESMA) said its inquiry covers collateral transfer, management, protection and use. It described tokenisation as moving beyond testing into financial-market operations, with collateral mobilisation particularly relevant to central clearing.
Consultation examines tokenised collateral in EU clearing
The call for evidence seeks to establish how tokenised arrangements function in practice and how the existing framework can accommodate them. Feedback will inform the authority’s choice of regulatory or supervisory convergence action within its remit.
Chair Verena Ross linked the consultation to the goal of enabling tokenisation to develop safely and at scale across the Single Market. She said cross-border tokenised markets need legal certainty, interoperable infrastructure and appropriate supervision, while highlighting their potential to improve efficiency and integration.
Collateral must remain usable through a default
The review asks how tokenisation affects the entire collateral lifecycle, particularly when a clearing member defaults. Respondents are asked to address clearinghouses’ ability to obtain the assets, move them and convert them into liquidity when required.
Klaus Löber, Chair of the authority’s CCP Supervisory Committee, stressed that technological changes must leave fundamental safeguards intact. Collateral must retain high quality, legal enforceability, strong liquidity and ready operational availability, including during stressed conditions and after a member default.
The inquiry also seeks views on changes to the risk profile of collateral that is already eligible. Cointelegraph reported that the consultation asks about redemption-related delays, transfer restrictions and whether token transfers provide ownership of, or enforceable rights to, underlying assets.
Digital twins and ledger-issued assets face scrutiny
Within its scope, the consultation examines digital twins—tokenised versions of assets that remain in conventional infrastructure—alongside assets created natively on distributed ledger technology, plus hybrid models and how these interact with tokenised cash and other settlement assets.
For tokenised collateral in EU markets, the review examines how distributed ledgers connect with conventional infrastructure while preserving client protection, segregation and settlement finality. The corroborating report identifies stablecoins, central bank money and tokenised deposits among the settlement assets under examination.
Live clearing use provides the backdrop
The report notes that tokenisation has moved into active European clearing operations, driven by banks and investors seeking quicker access to securities to meet margin requirements. In July 2025, Eurex Clearing launched a collateral service built on distributed ledger technology, with JPMorgan completing its inaugural live transaction by transferring securities from a separate custody location on behalf of Dutch pension investor PGGM.
The report also connects the consultation to the Eurosystem’s September launch of Pontes, which enables tokenised asset transactions to settle using central bank money. It reports that the authority identified Pontes as a potential link between blockchain infrastructure and existing settlement systems for collateral arrangements.
Stakeholders can submit contributions through the authority’s consultation webpage until January 15, 2027. Responses will be published after the consultation closes unless respondents request otherwise. The authority will evaluate feedback in the first quarter of 2027, alongside its wider tokenisation work, before determining the appropriate course of action.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.